Even though COVID19 and Brexit are now officially in the past, their effects are far from over. In particular, high inflation continues to rumble on and looks set to do so for the foreseeable future. This means that many businesses are struggling and for some, the struggle is too much and bankruptcy is the only option. If your are sadly in this situation, here are some tips on how to tell your staff about the bankruptcy situation.
Maintain confidentiality for as long as possible
If you are considering bankruptcy for your business, then restrict that fact to those who need to know, for as long as possible. If word gets out that your business is going bankrupt it may put you on a downward spiral with long-term implications.
For example, if you were thinking of going down the pre-pack administration route, you may find rumours of impending bankruptcy prompt key staff to leave. This may result in you not being able to get a successor company off the ground.
Even if you have no plans to start another business soon (or ever), having it known that you were unable to maintain confidentiality may count against you in other ways.
Make sure your message is relevant
At the end of the day, what your staff members really want to know, is where they stand in the present and the future. In many businesses, this is likely to depend on each individual’s specific employment status.
For example, an employee on a permanent contract is likely to be in a different position from an employee on a fixed-term contract. Permanent employees with differing lengths of service may also be in different situations. You will, therefore, need to ensure that your overall message covers all of your staff.
Think about how to structure your message
All staff will need to know that your company is going bankrupt. After that, however, what they need to know is likely to differ based on their employment status. Employees are not going to appreciate being kept waiting on tenterhooks to hear what they need to know. It can, therefore, be preferable to split employees into groups after the main announcement.
If you can’t do that, then the next-best alternative is likely to give a high-level overview that covers most, if not all, employees. Then provide the information that’s relevant for the largest group of employees and so on to the smallest group of employees. Alternatively, email all employees and allow them to read the information that’s relevant to them. Then bring people together for questions.
Whatever approach you take, you should aim to deliver the key information first and only then provide any supplementary information, such as the reasons for the bankruptcy. Keep in mind, that your employees may be divided about whether or not they actually care about these. Also, keep in mind that employees may vary greatly in their awareness of the company’s situation.
Use the right tone
Avoid playing the blame game and or trying to pile on the positivity. Both approaches are not likely to sit well with people. Instead, aim for serious but constructive. Focus on what you can deliver for your employees and/or what help they can get from other sources.
Likewise, be careful of “merailing” your overall message. In other words, remember that this is about your staff not you. Be very careful of taking a “we’re all in this together” approach. It can be very hard to make this work in practice because, in the real world, the bankruptcy is likely to hit people in very different ways.
Practice in private until you are confident
It’s OK to be emotional when making the announcement but you still need to have a high level of self-control. Keep in mind that you are likely to need to deal with your staff’s emotions. These may run high and not in a good way.
If you need advice or support in this situation, please get in touch.
